Global and European M&A deal volumes fell to their lowest levels for three years during the third quarter of 2016, following Britain’s vote to leave the European Union this June.
Mergermarket data shows that 3,595 global deals were announced during Q3, the lowest quarterly figure since the second quarter of 2013 (3,546), and the worst Q3 since since 2012, when 3,296 deals were announced.
Global deal volume fell by more than 20 percent on Q3 last year, when 4,501 transactions were announced. Meanwhile, the European market saw 1,323 deals during Q3 – the lowest figure since Q3 2012 (1,271).
Total deal values were also affected, with $8.13 trillion worth of global deals announced – 15 percent down on the same period last year, when total deal values stood at $9.58 trillion.
Allen & Overy corporate co-head Richard Browne believes Brexit had a tangible effect on the M&A market. “The most recent quarter has been much quieter than the first half of this year and much quieter than Q3 in the previous two years. That’s unsurprising, most obviously because of Brexit,” he said. “The run-up to the vote created uncertainty and then there was shock at the outcome. Most wanting to do transactions took time over the summer to absorb what it meant.”
Bob Bishop, international head of corporate at DLA Piper – which topped the Q1-Q3 global rankings by volume, acting on 317 deals – agrees that Brexit impacted on the markets, but believes things are now improving.